Kazakh Kazakhmys slightly decreases copper production in Jan.– Sept.

Baku, Azerbaijan, Oct. 30

By Elena Kosolapova - Trend: Kazakhstan's Metallurgical Corporation Kazakhmys decreased copper cathode equivalent production from 231,100 metric tons in the first nine months of 2013 to 214,900 metric tons in same period of 2014, the company reported on Oct. 30.

The company noted that it entered into an agreement to transfer certain mature assets in the Zhezkazgan and Central Regions (the Disposal Assets) to Cuprum Netherlands Holding B.V., a company owned by Vladimir Kim and Eduard Ogay. Independent shareholders approved the transaction August 15, 2014 and completion is expected imminently.

Following completion of the transaction, the group will continue to own the mining and producing assets in the East Region and the Bozymchak mine in Kyrgyzstan, as well as the major growth projects Bozshakol, Aktogay and Koksay (the Retained Assets). The company will be renamed KAZ Minerals PLC upon completion.

"I am pleased to report that regulatory consents for the restructuring have been obtained," Kazakhmys' Chief Executive Oleg Novachuk said. "We are now very close to the completion of the transaction and with it the creation of KAZ Minerals, a high growth copper company focused on large scale, low cost open pit mining in Kazakhstan."

Copper cathode output at the Retained Assets increased by 10 percent and hit 59,000 metric tons in the reporting period, the company said.

Output benefited from the Nikolayevsky modernization programme which raised the concentrator recovery rate from 80 to 88 percent.

The average copper grade at the retained assets achieved in the first nine months of 2014 was 2.5 percent, above the 2.37 percent in the comparative period in 2013, as higher grade sections were exploited at the Orlovsky mine in the first half of the year.

Retained Assets remain on track to achieve 2014 full year copper cathode production guidance of 80,000 metric tons to 85,000 metric tons.

In the first nine months of 2014, zinc in concentrate output at the retained assets decreased by 10 percent to 89,400 metric tons, resulting from a combination of lower ore extraction volumes and lower grade compared to the corresponding prior year period.

Silver output decreased by 24 percent to 2.630 million ounces, reflecting lower silver in concentrate production and a higher release of work in progress when compared to the prior year period. Gold metal output was 23,300 ounces, 32 percent below the production achieved in the first nine months of 2013, due to the lower gold in concentrate output in the reporting period and build up of work in progress at the end of September 2014.

Copper cathode equivalent production at the disposal assets which will be transferred to Cuprum Netherlands Holding B.V, hit 153,700 metric tons in Jan.- Sept. 2014 compared to 160,800 metric tons in the same period of 2013. Three percent lower copper in concentrate production mainly caused the decrease.

The average copper grade at these fields was 0.82 percent, higher than in the comparative period, mainly driven by the increase in grade at Akbastau mine in the Central Region.

Silver production at the disposal assets in the first nine months of 2014 decreased by 21 percent to 5.509 million ounces, reflecting the 12 percent decline in volume of silver metal in ore mined compared with the same period in 2013.

Gold production in the first nine months of 2014 was 16 percent above the comparative period at 51,100 ounces due to a higher release of work in progress compared with prior year period.

Kazakhmys PLC is a leading international natural resources group. It is the largest copper producer in Kazakhstan and one of the top worldwide with 16 operating mines, seven concentrators and a copper smelter. Kazakhmys Mining has a full range of facilities enabling it to process ore extracted through to finished metal. Total copper cathode equivalent output from own ore was 294,000 metric tons in 2013. The group has two major copper projects under construction.
Kazakhmys Mining produces significant volumes of other metals, including zinc, silver and gold. In 2013, it produced 134,000 metric tons of zinc in concentrate. The group is amongst the largest global silver producers with output of 14 million ounces in 2013.
Kazakhmys Power operates three captive power stations which supply electricity to Kazakhmys Mining and third parties. In 2013, net power generated by captive power stations was 5,723 GWh.

Edited by C.N.